Move 2 You

In other articles we’ve spelled it out clearly – one of the biggest problems with today’s property market is mortgages. Specifically, how much harder it has now become to get a mortgage.

Especially hard for FTBs (First Time Buyers).

And as we all know, FTBs are SO important to the property market. Without them the whole system grinds to a juddering halt. As we can so clearly see right now.

We as we promised in this article we’re going to provide a lot of information that can help you get hold of a mortgage. Some of this info is common sense. Some of it is uncommon sense. And some of it is only known to a very few souls … so only they are benefiting from these secrets.

So do check back here as we reveal more of what you need to know. Our goal is to help people successfully move house (whether you’re selling, buying or both). And by helping you, we hope you’ll think of move2you as a really useful service, and you’ll recommend us to your friends and contacts.

Because the more people who use move2you the more that every single person benefits (not just from this information, but in the matching-people-and-properties-service that’s at the heart of how we help).

So, to start the ball rolling here’s the Option 1 for Raising the Deposit. (We’ll cover at least 7 fundamentally different methods in this series of articles).

Option 1 is in the “common sense” category. It won’t be a surprise to you, and it may be the only way you can think of to raise a deposit.

That’s right – we’ll start off gently and easily … we’ll save the more unusual methods (and certainly less well known ones) for later articles … because we would love you to come back here soon!

Option 1 is the most well-known method. It’s the first one most people try.

But … it’s also the slowest method, and, surprisingly, it’s the hardest method for most people.

And the method is …

… “Save It”.

Sorry to be so dull and predictable there! I did warn you that it wouldn’t be a surprise!

But let’s not just dismiss this as “yeah … of course I knew that … now tell me something I don’t know!” … because we’ll cover a whole variety of different methods, as we’ve promised.

Don’t just dismiss it … because it’s really important that you appreciate the pros and cons of this method. And remember … for many people, this is the only method they think is available to them!

So what are the pros?

- it’s easy to understand

- it’s personally “safe” (no risks involved)

- it’s easy to do (in theory)

- if you do it right, you’re guaranteed to get you to your target … eventually

Erm … any more pros to this method? (Please comment on this article to make any suggestions!)

Well, what about the cons?

- it’s not possible if your outgoings are higher than your income

- even if you’ve saved some money, it can still be tempting to spend it

- it’s easy not to save at any time … so you don’t progress

- it takes discipline

- interest rates on savings are, well, pathetic right now, so your savings won’t really benefit from compounding (By the way, you may be interested to know that Einstein called Compounding the Eighth Wonder of the World … do you realise its power?!)

- It’s. Soooooo. Slooooooowwww. Sure, you’re guaranteed to get there (if you’re disciplined) but it takes ages

Hmmm … a bit of a damp squib, do you think?

Sure, there are faster ways. And if you’re up for a challenge, there are ways that are certainly more fun!

But “Save It” is, nonetheless, a very real Option 1 for Raising the Deposit.

Simple rules:

(a) make sure your income is higher than your outgoings,

(b) be ruthless in minimising your outgoings,

(c) save the difference

(d) keep going until you reach your target.

Stick to those rules and you’ll get there.

Some time.

So there you have it – Option 1 for Raising the Deposit.

Options 2 – 7 will get you there faster. So come back soon to find out more.

(But don’t discard Option 1 – it certainly has its part to play … even if it’s one of many of the 7 Options that you use.)

Do let us know your views … we love to read your comments on these articles.

Speak soon.

Chris

In a previous article posted here we’ve talked about the “Housing Ladder”, and how we should really think about it as a “Housing Escalator” – an idea that opens you up to a different way of thinking about what opportunities really exist for you to move house.

But whatever you call it – ladder or escalator – there’s one key ingredient to make the whole thing work. It’s the person who should be everyone’s best friend … the First Time Buyer (FTB).

And right now the Housing Ladder looks less like a ladder, and more like a Well Fortified Castle with the Drawbridge pulled fully upright and firmly shut!

Why’s that then? (we’re just about to tell you.)

And can we help? (hint: answer’s yes – read on to find out how.)

First, let’s look at why FTB’s are finding it so hard right now. Think back to the nineties and early “naughties” – in those times house prices were rising steadily … and so were people’s pay. So lenders could be sensible, and use “multiples of income” to be confident that you’d be able to repay your mortgage.

Multiples of 2.5x – 3x income were commonplace, weren’t they?

But then the craziness started … house prices were shooting up like there was no tomorrow (turned out they were sort of right after all – eventually there was no tomorrow!) … but pay didn’t shoot up in the same way.

The result? House prices started becoming genuinely more expensive … for everyone. Especially for FTBs.

But … banks needed to keep lending … otherwise their income dried up. And they really didn’t want that to happen … not when there was so much money to be made. So they became more cavalier with their lending.

We started to see multiples of 4x … 5x … even 7x earnings.

And that’s if you bothered to tell them your earnings at all! It got to the stage when they just didn’t seem to care anymore.

Don’t have enough income? “No Problem!” said the banks and other mortgage lenders … “as house prices are shooting up, just tell us that you can afford it, and we’ll lend pretty much whatever you need … if it turns out you can’t pay your mortgage, we’ll just repossess your house, which will have gone up in value … a lot … and we’ll be able to sell it and get our money back that way.”

Two things happened as a result … one, the chickens came home to roost, so to speak. In other words, so many people could no longer afford their mortgages that the number of repossessions became enormous … so big that they effectively flooded the market with properties that were trying to be sold off “cheap”.

But the buyers slowed right down. And that led to what we all now know as “The Credit Crunch”.

And the second thing that happened was lending swung right back the other way. Banks then became so worried about lending they made sure they’d only lend if there was plenty of equity in the house.

So the size of deposits required became … well … big. People are needing to find 25% or more as a deposit now. (OK, some deals are now becoming a bit more realistic, but it’s slow change at the moment).

Now, that’s the background to the absence of FTBs. But we desperately need them back in the market don’t we? They are the bedrock of housing chains.

And what we need is FTBs (and everyone else too) to have the ability to buy a house at the right price. So they need:

- the right house

- the right price

- and a deposit (that’s hard to get).

OK, so now we need to help them.

And that’s what we’re going to do here at move2you.

We’re going to be revealing the methods (and there are lots of them) that people can use to raise the deposit they need.

Of course, that doesn’t just apply to FTBs … raising the deposit is useful for anyone buying a house.

So come back here again soon … when we’ll start to reveal methods of raising deposits. In fact we’ll even reveal methods of owning a house without needing a mortgage at all … (and all completely legally, in case you were wondering!)

Only property investors know some of this stuff … and while they’re making a killing from knowing it, it’s about time FTBs benefited from knowing this stuff too.

So, we look forward to welcoming you back soon as we build up the article base of information that could make all the difference to helping you buy your first (or next) home.

Speak soon.

Chris